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CA Foundation · Business Laws · The Indian Contract Act, 1872

Tanvi, a 25-year-old competent adult, signs an agreement to sell her car to Umesh for Rs 3 lakh. She was pressured by Umesh using a threat to file a false criminal complaint against her. What is the correct description of this contract?

The contract is voidable at Tanvi's option. Threatening a false criminal complaint is coercion, so her consent was not free. Under the Act, the party whose consent was not free may either rescind the contract or choose to accept it; the contract is not automatically void.

  1. AVoid, because consent obtained by coercion is never valid
  2. BVoidable at Tanvi's option, because her consent was not freeCorrect
  3. CValid and binding, because Tanvi is competent to contract
  4. DIllegal, because the object of the agreement is unlawful

Explanation

Consent obtained by coercion is not free consent, and the contract is voidable at the option of the party whose consent was so caused. Tanvi can rescind it or choose to affirm it. Option 0 is wrong because it is voidable, not void.

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